Income Taxes

9 Months Ended

Oct. 31, 2021

Income Taxes

8. Income Taxes

8.

Income Taxes

The Company's effective tax rate for the third quarter of FY22 was 31.7% which differs from the U.S. federal statutory rate of 21% primarily due to rate differentials in foreign tax jurisdictions and state income taxes. The Company's effective tax rate for the third quarter of FY21 was 25.9%, which differs from the U.S. statutory rate of 21% primarily due to rate differentials in foreign tax jurisdictions and state income taxes. The Company's effective tax rate for the nine months ended October 31, 2021 was 29.8% which differs from the U.S. federal statutory rate of 21% primarily due to rate differentials in foreign tax jurisdictions and state income taxes. The Company recorded a discrete item related to the remeasurement of deferred taxes for $0.8 million of tax expense primarily as a result of the statutory change in the State of Alabama apportionment factor. The Company's effective tax rate for the nine months ended October 31, 2020 was 21.3% which differs from the U.S. statutory rate of 21% primarily due to Global Intangible Low-Taxed Income (“GILTI”) and an adjustment to reflect the recapture of U.S. NOL as a result of applying the GILTI high tax exclusion in tax years FY19 and FY20. The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. The valuation allowance was $3.0 million and $2.7 million at October 31, 2021 and January 31, 2021, respectively.